News release

CHICAGO, IL

Tech Sector Ignites Real Estate Markets, Anchoring Innovation Hubs

2013-08-14T05:00:00Z

Jones Lang LaSalle’s national ranking of top high-tech cities highlights the influence of high-tech start-ups on regional economic growth across the U.S.

CHICAGO, Aug. 14, 2013 — It’s not just Silicon Valley that forms the nucleus of the U.S. high-tech growth economy, but hubs such as Atlanta and Chicago are emerging thanks to the burgeoning high-tech start-up culture. Jones Lang LaSalle’s (JLL) national ranking of top cities for high-tech companies shows the impact of the evolving start-up culture on office demand, traditional workplace environments, and regional economies.

“High-tech industry growth has outpaced the national economy by an average of four to one since 2010,” explains Amber Schiada, Research Manager, Jones Lang LaSalle. “This economic contribution is driven by start-ups, many located in high-tech incubators offering office space, but also access to professional services, collaboration, and venture capital opportunities.”

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Venture capital investment trends
back this up. The VC sector remains confident in high-tech, making it
the highest-funded industry across the U.S., capturing 60.8 percent of
total funding between the third quarter of 2012 and second quarter of
2013.

“High-tech start-ups – powered by significant VC funding – continue
to spread to promising new cities in an effort to tap the highly-skilled
talent pools in those regions,” said Julia Georgules, Research Manager,
Jones Lang LaSalle.

New centers of innovation: top tech marketsFor
every new innovation job created in a community, five additional jobs
are created in the same metropolitan area. With high-tech incubators
providing centers for these clusters to thrive, an increasing number of
U.S. cities are relying on the high-tech sector for economic growth.
In fact, the sector has not only stimulated real estate recovery and
expansion, but it is also helping drive new construction. The top 12
markets tracked in JLL’s report account for almost 50 percent, more than 23 million square feet of new construction.

JLL’s index (see graphic) rates
each city on four primary factors: high-tech employment; share of U.S.
venture capital funding; intellectual capital; and innovation. As a
result, the top five markets include longstanding high-technology
industry meccas – but then the list gets interesting. New York is just
outside the top ten, outranked by emerging clusters in Atlanta,
Raleigh-Durham and Denver.

Cities such as Minneapolis, Indianapolis, and Baltimore are climbing
the list rapidly with robust high-tech clusters locating in proximity to
highly-skilled labor pools of GenX and Millennial high-tech
professionals. The competition for space in core high-tech markets is
pushing rents to a premium. Average rents in these markets at the end of
the second quarter this year were 11.6 percent higher than the national
average at $32.69 per square foot compared to $29.29.

Incubators foster innovation in start-ups and Fortune 1000 companies

Technology
incubators have become the modern alternative to the suburban garages
where Apple, Hewlett Packard, and other high-tech giants began. They
have maintained the focus on disruptive technologies and added modern,
flexible office space, amenities such as, furniture, networking,
training and access to venture capital opportunities.

“We think clustering is essential and believe it is significantly
harder to innovate in isolation than when you are surrounded by
like-minded entrepreneurs,” explains CEO of high-tech incubator,
RocketSpace. “We provide the optimal environment for disruptive
technology companies to thrive.”

While RocketSpace continues to
focus on high-tech start-ups and entrepreneurs, the incubator has also
created a Corporate Innovation Program with Fortune 1000 companies such
as a Big Three automaker, a major airline, a top beverage brand, and
several technology giants. RocketSpace provides these companies with
consulting and research, identifying technology themes and companies. As
a result, corporate funding and venture capital opportunities naturally
emerge for the start-ups, while the corporations access a deep pool of
product and service ideas.

For more news, videos and research resources on Jones Lang LaSalle, please visit the firm’s U.S. media center Web page: http://bit.ly/18P2tkv.

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.3 billion of real estate assets under management. For further information, visit www.jll.com.